Markets rally on infrastructure deal
UBS Managing Director Jason Katz and Fidelity Investments John Gagliardi discuss the markets’ reaction to Biden reaching deal on infrastructure package
Senate Minority Leader Mitch McConnell on Monday ripped Democratic leaders for trying to push a bipartisan infrastructure package through Congress in tandem with a sweeping, multitrillion-dollar reconciliation bill that would dramatically expand the social safety net and fight climate change.
President Biden suggested last week that he may veto the bipartisan framework unless it's accompanied by another measure that addresses longtime Democratic priorities, temporarily imperiling the deal's passage. He later walked back the comments and clarified that he would sign the agreement if it were passed on its own.
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But McConnell demanded that House Speaker Nancy Pelosi and Senate Majority Leader Chuck Schumer also need to agree to separate the two pieces of legislation, warning that Biden's promise will be a "hollow gesture" otherwise.
"The president has appropriately delinked a potential bipartisan infrastructure bill from the massive, unrelated tax-and-spend plans that Democrats want to pursue on a partisan basis," the Kentucky Republican said in a statement. "Now I am calling on President Biden to engage Leader Schumer and Speaker Pelosi and make sure they follow his lead."
McConnell's comments highlight the challenges that Democrats face in pursuing their so-called "two-track" agenda – approving the bipartisan deal while simultaneously pushing through a larger reconciliation package chalk that would include billions in new funding for things like child and elder care, health care and fighting climate change.
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But with incredibly slim majorities in the House and Senate, Democrats need to strike a delicate balance or they risk losing the support of either moderate or progressive members.
Some of the party's left-wing members have threatened to withdraw support for the bipartisan bill without a commitment for billions to address climate change; at the same time, some of the party's more moderate members have questioned the need for another multitrillion-dollar package.
Pelosi has said that she will not take up either proposal in the House until both get through the Senate.
"If there is no bipartisan bill, then we'll just go when the Senate passes a reconciliation bill," Pelosi said during a Thursday press conference.
Democrats triggered the start of the budget reconciliation process last week and are considering a sweeping $6 trillion package that would build on Biden's $2.3 trillion American Jobs Plan and $1.8 trillion American Families Plan.
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Meanwhile, Biden is traveling to Wisconsin this week to bolster support for the potential benefits of the bipartisan bill.
The agreement – struck last week between the White House and a group of 21 senators – includes $559 billion in new spending that will be invested in roads, broadband internet, electric utilities and other traditional infrastructure projects over the next five years.
The plan will be funded from a variety of sources, including reducing the IRS tax gap, redirecting unused federal unemployment money from the 26 states that are prematurely ending the relief program and repurposing other COVID-relief measures.
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